Wednesday, November 10, 2010

The market broke under yesterday's low early in trading then rallied for the remainder of the day. It initially appeared that a market top was in yesterday, but this is once again questionable for several reasons.

The retracement of the decline is now slightly above the 61.8% retracement level with the rally counting well as a complete impulse wave. Also wave (iv), if the top is already in, is quite odd as a zigzag+flat double and does not count naturally. It is not well proportioned to wave (ii). Finally the impulse lower has a very corrective feel with several broken guidelines, an indication that it is a wave within a larger corrective pattern.

For the reasons above, the now large retracement of (iii) and large size of (iv) is acceptable but does not disprove the complete top argument. If prices move lower tomorrow, particularity under today's low, this will be a very strong indication that the top completed Tuesday.

The entire rally since March 2009 should complete following the completion of the rally since 8/31. A more comprehensive view of the count can be seen here.

The market broke under yesterday's low early in trading then rallied for the remainder of the day. It initially appeared that a market top was in yesterday, but this is once again questionable for several reasons.

The retracement of the decline is now slightly above the 61.8% retracement level with the rally counting well as a complete impulse wave. Also wave (iv), if the top is already in, is quite odd as a zigzag+flat double and does not count naturally. It is not well proportioned to wave (ii). Finally the impulse lower has a very corrective feel with several broken guidelines, an indication that it is a wave within a larger corrective pattern.

For the reasons above, the now large retracement of (iii) and large size of (iv) is acceptable but does not disprove the complete top argument. If prices move lower tomorrow, particularity under today's low, this will be a very strong indication that the top completed Tuesday.

The entire rally since March 2009 should complete following the completion of the rally since 8/31. A more comprehensive view of the count can be seen here.

My trading philosophy is 95% based on my own Elliott Wave analysis of the S&P 500. I try to keep my analysis and trading as simple as possible and do not use trend lines, channels, or definite retracement, price, or time targets. To me, inspecting the proportionality and symmetry of a market's price structure is the key to mastering the principle; it is through this that low-risk, high-reward trading opportunities are found.

Because they are the only things I look at when trading, the quality of the charts I post on this blog are very important to me. I think you will find my work to be the best Elliott Wave analysis of the S&P 500 on the internet.